Berlin, 21 November 2019 - "Revolution of Real Estate Valuation" is the title of the research project that Berlin-based Capital Bay GmbH has entered into with the Data Innovation Lab of the Technical University of Munich (TUM DI LAB). The aim of the collaboration, which will initially run for two years, is to use statistical-econometric methods to determine the value of the property more precisely. The TUM DI LAB team will develop calculation algorithms that make more precise cash flow predictions based on micro-, socio- and macroeconomic factors. The data required for this is provided by 21st REAL ESTATE.
The first step is to develop a market rent model that will enable a more precise determination of cash flows and thus the IRR for all asset classes in the business plan on which the property valuation is based. In a further step, artificial intelligence is to be developed that automatically applies the individual valuation strategies for properties to specific property and market situations in accordance with the dynamic method developed by George Salden. For example, the algorithm should recognise the potential for value enhancement in the existing tenant list or the condition of the building or property, taking into account the forecast market development.
George Salden, CEO of Capital BAY: "The insurance industry has long had automated models for predicting local hailstorms. We are now working on a more accurate forecast of a property's cash flows, depending on parameters such as demographic or economic trends that influence the value of the property. In this way, we are revolutionising property valuation, which is still essentially based on simplified discounted cash flow models."
